Payworks raises 4.5M in Series A, Talks U.S. Expansion

It was announced yesterday that Munich-based payment processing startup Payworks raised $4.5 million in a Series A round, with Rumford, HW Capital, and Speedinvest leading the investment.

Payworks, which provides SaaS (Software as Service) technology for credit processing, plans to use the new capital to expand its presence in the global market, specifically in Europe and North America.

“North America is the most interesting market for us currently, because there is such a major shift in payments infrastructure going on,” says co-founder and CEO Christian Deger of the planned expansion. “It’s a big opportunity for us, because the shift to EMV payments means a shift in how payments are processed.”

For the US in particular, the integration of EMV — or chip-enabled — into payment networks has been slow-going and filled with roadblocks — especially when it comes to mobile solutions, as many merchants in the U.S. do not have the technology or software required to handle them. This presents a unique set of challenges to companies like Payworks according to Deger, on both the technical and the consumer levels, as Europe has had EMV payments available for about ten years.

“There certainly is the challenge of making it useful to the consumer,” says Deger, who noted that during his time in the US he was not allowed to make an EMV transaction around “75% of the time,” because existing EMV terminal weren’t operational yet.

These difficulties raise costs as well as security concerns for both merchants and consumers, who have to process money, or have their money processed, on lagging and outdated tech — precisely the problem Payworks was founded to solve four years ago.

The company’s gateway product, its Pulse technology, acts as a platform for the seamless processing of EMV or chip-enabled payments at the point of sale, for both traditional and mobile solutions. Currently, Payworks’ technology works with Stripe in the U.S., and Barclays in the UK, as well as a host of other providers in its home country.

The API-based Pulse platform also allows payment providers to integrate their own specialized solutions, should they choose. This developer friendly model is one of the core strengths of the technology, says Deger, especially in regards to the U.S., as that flexibility allows for more ease of use from a consumer standpoint.

Payworks opened its office in Austin, Texas two months ago, and might open West Coast and East Coast offices sometime in the near future, according to Deger.

To learn more about payments and other fintech trends, join us at Bank Innovation Israel, November 1-3. Register here

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